u observe that a firm's ROE (return on equity) is above the industry average, but both its Profit rgin and Equity Multiplier are below the industry average. Which of the following statements is 17. Yo Mar CORRECT? (Hint: consider the DuPont equation.) Its Total Assets Turnover ratio must be above the industry average. Its Return on Assets must equal the industry average. Its Times Interest Earned ratio must be below the industry average. Its Total Assets Turnover ratio must be below the industry average. Its Total Assets Turnover ratio must equal the industry average. a. C. d. e. 18. Please select the CORRECT statement. a. Other things held constant, the more debt a firm uses, the higher its Return on Total b.In general, if investors regard a company as being relatively risky and/or having. c. The price/earnings (P/E) ratio tells us how much investors are willing to pay for a dollar d. Assets will be. relatively poor growth prospects, then it will have relatively high P/E (price-to-earnings) and M/B (market-to-book) ratios. of current earnings. In general, investors regard companies with higher P/E ratios as being less risky and/or more likely to enjoy higher growth in the future. In general, investors regard companies with higher Market-to-Book ratios as being riskier and/or less likely to enjoy higher growth in the future. 19. (TRUE or FALSE) High current and quick ratios always indicate that the firm is managing its liquidity position well 20. (TRUE or FALSE) The inventory turnover ratio and days sales outstanding (DSO) are two ratios that are used to assess how effectively a firm is managing its current assets. 21. (TRUE or FALSE) Any reduction in the Days Sales Outstanding ratio will increase the value of the firm. 22. (TRUE or FALSE) Profitability ratios show the combined effects of liquidity, asset management, and debt management on a firm's operating results. 23. Select the CORRECT statement. operating margin measures operating income per dollar of assets. The basic earning power ratio (BEP) reflects the earning power of a firm's assets after giving consideration to financial leverage and tax effects. The times-interest-earned ratio measures the extent to which operating income decline before the firm is unable to meet its annual interest costs. The more conservative a firm's management is, the higher its total debt to total capital ratio is likely to be All of the above are CORRECT can